2020 Colorado Revised Statutes
Title 37 - Water And Irrigation
Article 87. Reservoirs
Section 37-87-104. Liability of owners for damage.

(1) Any provision of law to the contrary notwithstanding, no entity or person who owns, controls, or operates a water storage reservoir shall be held liable for any personal injury or property damage resulting from water escaping from that reservoir by overflow or as a result of the failure or partial failure of the structure or structures forming that reservoir unless such failure or partial failure has been proximately caused by the negligence of that entity or person. No entity or person shall be required to pay punitive or exemplary damages for such negligence in excess of that provided by law. Any previous rule of law imposing absolute or strict liability on such an entity or person is hereby repealed.

2. No such entity or person shall be liable for allowing the inflow to such reservoir topass through it into the natural stream below such reservoir.

3. (a) No stockholder, officer, or member of a board of directors of an owner of a reservoir shall be liable for any personal injury or property damage resulting from water escaping from such reservoir or as a result of the failure or partial failure of the structure or structures forming such reservoir for which the owner shall have been found liable if a valid liability insurance policy, or adequate substitute as provided in paragraph (b) of this subsection (3), has been purchased by the owner of the reservoir and is in effect at the time such damage occurs. Such insurance policy shall insure against such damages and provide coverage in an amount of not less than fifty thousand dollars for each claim and in an aggregate amount of not less than five hundred thousand dollars for all claims which arise out of any one incident. The policy may provide that it does not apply to any act or omission of a stockholder, officer, or member of a board of directors of an owner if such act or omission is dishonest, fraudulent, malicious, or criminal. The policy may also contain other reasonable provisions with respect to policy periods, territory, claims, conditions, and other matters common to such policies of insurance. The limitation of liability pursuant to this paragraph (a) shall not apply to any criminal, fraudulent, or malicious act or omission by a member of the board of directors of the owner, an officer of the owner, or a stockholder of the owner, nor shall it apply to any ultra vires act of the owner or of a member of the board of directors, an officer, or a stockholder of such owner. The provisions of this paragraph (a) shall not be deemed to impose any liability upon a member of the board of directors, an officer, or a stockholder of the owner of a reservoir beyond that provided in section 7-42-118, C.R.S.

(b) An adequate substitute for such insurance may be in the form of:

1. A good and sufficient bond, in an amount equal to such recovery limitations dulyexecuted by a qualified corporate surety approved by the commissioner of insurance, conditioned upon the payment by the entity or person who owns, controls, or operates a water storage reservoir of any valid and final judgment for damages imposed within the judgment limitations established in this subsection (3);

2. A good and sufficient escrow of acceptable securities, as defined in section 24-91102, C.R.S., or an annual irrevocable letter or annual letters of credit issued by any national or state bank or any bank for cooperatives as chartered under Title III of the federal "Farm Credit Act of 1971", as amended, and deposited with an escrow agent pursuant to an escrow contract or agreement requiring the escrow agent to pay from the escrow account amounts necessary to discharge a valid and final judgment for damages within the limits established in this subsection (3). Such escrow contract or agreement shall provide that it cannot be revoked or amended until after any claims for damage against such entity or person have been discharged or until applicable statutes of limitations pertaining thereto have expired.

3. A combination of insurance and any of the substitutes described in this paragraph(b).

Source: L. 1879: p. 107, § 40. G.S. § 1726. R.S. 08: § 3204. C.L. § 1684. CSA: C. 90, § 82. CRS 53: § 147-5-4. C.R.S. 1963: § 148-5-4. L. 81: Entire section R&RE, p. 1778, § 1, effective May 27. L. 84: (1) and (2) amended and (2.5) added, p. 963, § 3, effective April 30. L. 85: (2) amended, p. 1157, § 1, effective June 6. L. 86: Entire section R&RE, p. 1091, § 1, effective May 16.

Cross references: For the federal "Farm Credit Act of 1971", as amended, see 12 U.S.C. § 2001 et seq.